1
BLUE RHINO CORPORATION
104 CAMBRIDGE PLAZA DRIVE
WINSTON-SALEM, NC 27104
(336) 659-6900
AT THE COMPANY:
MARK CASTANEDA
CHIEF FINANCIAL OFFICER
(336) 659-6755
FOR IMMEDIATE RELEASE
BLUE RHINO POSTS RECORD REVENUES FOR
FOURTH QUARTER, FISCAL YEAR;
INCREASED PRODUCT COSTS IMPACT RESULTS
HIGHLIGHTS:
o FY '00 REVENUES $78.7 MILLION, UP 46% FROM FY `99; Q4 REVENUES $32.3
MILLION, UP 39% OVER PRIOR YEAR
o FY '00 EPS $0.04 BEFORE OTHER NON-OPERATING EXPENSES VERSUS $0.38 BEFORE
OTHER NON-OPERATING EXPENSES IN PRIOR YEAR
o Q4 LOSS PER SHARE $0.14 BEFORE OTHER NON-OPERATING EXPENSES VERSUS INCOME
PER SHARE $0.32 IN PRIOR YEAR
o RETAIL LOCATION BASE GROWS 35% TO OVER 25,000 IN FY '00
o FY `00 CYLINDER TRANSACTIONS INCREASE 35% TO ALMOST 5 MILLION
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SUMMARY OF CONSOLIDATED OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED TWELVE MONTHS ENDED
JULY 31, JULY 31,
------------------- -------------------
2000 1999 2000 1999
--------- -------- -------- ---------
Total revenues $32,275 $23,268 $78,733 $53,820
Net income (loss) before other
non-operating expenses $(1,263) $ 2,456 $ 349 $ 2,959
Net income (loss) $(2,009) $ 2,426 $ (572) $ 2,067
EBITDA before other non-operating
expenses $ 1,280 $ 3,775 $ 7,270 $ 6,620
Diluted EPS $ (0.22) $ 0.31 $ (0.07) $ 0.27
Pro forma EPS before other
non-operating expenses $ (0.14) $ 0.32 $ 0.04 $ 0.38
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BLUE RHINO CORPORATION
ADD -1-
WINSTON-SALEM, N.C., SEPTEMBER 26, 2000--BLUE RHINO CORPORATION (NASDAQ: RINO),
a leading provider of branded products and services to retailers including gas
grill cylinder exchange, today announced its results of operations for the
fourth quarter and fiscal year ending July 31, 2000.
For the fourth quarter, total revenues increased 39 percent to $32.3 million
from $23.3 million in last year's fourth quarter. Continued expansion of retail
locations and product sales drove record revenues in the quarter. Net loss
before other non-operating expenses was $1.3 million, or $0.14 per share,
compared with net income of $2.4 million, or $0.32 per diluted share, in the
prior year's period. Other non-operating expense for the fourth quarter ended
July 31, 2000 represented $308,000 for Blue Rhino's share of start-up losses
related to its investment in the R-4 Technical Center, a propane bottling plant
that began production in May 2000. The extraordinary expense of $486,000 was for
unamortized discount and debt fees related to convertible notes that were
redeemed in June 2000.
As previously announced, gross margin was impacted by increased payments in the
fourth quarter to distributors to partially offset historically high wholesale
propane costs. However, operating results were impacted by approximately
$240,000 more than estimates previously announced due to one customer's return
of overfill prevention device (OPD) units for design modifications.
Billy D. Prim, Blue Rhino's chairman and chief executive officer, said, "We
continued to experience significant growth in locations and demand, but
wholesale propane prices were at a 20-year high during our peak period. We
decided to protect our retailers from supply disruptions by voluntarily
increasing payments to our distributors. This was a tough decision, but our
actions were absolutely necessary to support our infrastructure, which we
believe will ultimately benefit us in the long term. We have begun to increase
prices to retailers."
FISCAL-YEAR RESULTS
Total revenues were $78.7 million for the 12-month period ended July 31, 2000,
an increase of 46 percent from $53.8 million during the comparable prior-year
period. Net income was $349,000, or $0.04 per diluted share, before the
previously mentioned other non-operating expenses, compared with income of $3.0
million, or $0.38 per share, in fiscal 1999 before other non-operating expenses
of $862,000, which were related to a cancelled stock offering and Blue Rhino's
share of losses in Bison Valve.
Operating results were primarily impacted by reduced margins on cylinder
exchange in the peak fourth quarter and the previously mentioned OPD returns.
Sales, general and administrative expenses for the 12 months ended July 31,
2000, increased $5.0 million over the prior year primarily as a result of our
acquisition of Uniflame, additional advertising and promotional expenses, and
increased personnel and other administrative costs.
RETAIL-LOCATION GROWTH CONTINUES
The number of retail locations in service at July 31, 2000, grew to over 25,000
from 18,500 at July 31, 1999. During the fourth quarter, Blue Rhino added 1,650
new locations, including over 125 retail locations from two acquisitions. A
significant number of the locations added were in the grocery and convenience
classes of trade.
Retail-location growth coupled with increased consumer acceptance of cylinder
exchange propelled cylinder transactions for the year to approximately 5 million
units, up 35 percent from 3.7 million units
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BLUE RHINO CORPORATION
ADD -2-
for the comparable 12 months last year. Same-store cylinder transactions
increased 20 percent, with strong same-store sales growth experienced in all
regions of the country. Blue Rhino believes the key growth drivers were
continued strong gas-grill sales and an increase in consumers choosing cylinder
exchange over refill.
"Our strategy is to build Blue Rhino into a national brand," Prim said. "We will
continue to capitalize on the shift in consumer preference from refill to
cylinder exchange by penetrating our existing retail partners' locations and
establishing new relationships with retailers."
LOOKING FORWARD
Prim said, "We are disappointed with our fourth-quarter and fiscal-year results
and we are taking action to improve our results for next fiscal year. We are the
dominant player in the cylinder-exchange business, a market that we believe has
significant growth potential. We have taken strategic steps to diversify our
business by acquiring Uniflame and through our option to acquire Quickship,
which we believe will leverage our infrastructure and business model, help
reduce seasonality and generate long-term stockholder value."
Blue Rhino's fourth-quarter and year-end conference call is scheduled for 10:30
a.m. EDT on September 26, 2000. This call will be available live and by replay
over the Internet at www.streetevents.com. and at the Blue Rhino website at
www.bluerhino.com.
Blue Rhino is a leading provider of branded products and services to retailers
including gas grill cylinder exchange with branded cylinder displays at over
25,000 retail locations in 46 states plus Puerto Rico. Blue Rhino cylinder
exchange is offered at leading home center/hardware, mass merchants, grocery and
convenience stores. Cylinders are delivered to retailers through a national
network of 49 independent distributors. The company's stock is quoted on The
Nasdaq Stock Market under the symbol "RINO."
Certain statements in this release are forward-looking in nature and relate to
trends and events that may affect Blue Rhino's future financial position and
operating results including in particular, our ability to place Blue Rhino
cylinder exchange at additional retail locations, our ability to integrate
acquisitions and the successful launch of new products. Such statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The terms "believe," "plan," "expect," "anticipate,"
"intend," and "project" and similar words or expressions are intended to
identify forward-looking statements. These statements speak only as of the date
of this release. The statements are based on current expectations, are
inherently uncertain, are subject to risks, and should be viewed with caution.
Actual results and experience may differ materially from the forward-looking
statements as a result of many factors including those detailed in our filings
with the Securities and Exchange Commission. It is not possible to foresee or
identify all such factors. Blue Rhino makes no commitment to update any
forward-looking statement or to disclose any facts, events, or circumstances
after the date hereof that may affect the accuracy of any forward-looking
statement.
FOR FURTHER INFORMATION REGARDING BLUE RHINO,
VISIT THE BLUE RHINO WEBSITE AT WWW.BLUERHINO.COM
TABLES TO FOLLOW . . .
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BLUE RHINO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JULY 31, 2000 AND 1999
(IN THOUSANDS)
JULY 31, JULY 31,
2000 1999
--------- ----------
(UNAUDITED)
ASSETS
------
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 1,079 $ 913
ACCOUNTS RECEIVABLE, NET 19,254 12,736
INVENTORIES 5,415 106
PREPAID EXPENSES AND OTHER CURRENT ASSETS 3,746 2,137
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TOTAL CURRENT ASSETS 29,494 15,892
CYLINDERS HELD UNDER OPERATING LEASE AGREEMENTS, NET 27,277 17,205
PROPERTY, PLANT AND EQUIPMENT, NET 20,332 16,646
INTANGIBLES, NET 27,347 9,498
INVESTMENT IN JOINT VENTURE 3,027 --
OTHER ASSETS 698 658
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TOTAL ASSETS $108,175 $59,899
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LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $ 16,565 $ 6,386
CURRENT PORTION OF LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS 5,786 1,423
ACCRUED LIABILITIES 1,476 641
-------- -------
TOTAL CURRENT LIABILITIES 23,827 8,450
LONG-TERM DEBT INCLUDING CAPITAL LEASE OBLIGATIONS, LESS
CURRENT MATURITIES 42,396 24,111
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TOTAL LIABILITIES 66,223 32,561
STOCKHOLDERS' EQUITY 41,952 27,338
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $108,175 $59,899
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BLUE RHINO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND FISCAL YEAR ENDED JULY 31, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AND RETAIL LOCATIONS DATA)
THREE MONTHS ENDED FISCAL YEAR ENDED
JULY 31, JULY 31,
---------------------- -----------------------
2000 1999 2000 1999
-------- -------- -------- --------
(UNAUDITED) (UNAUDITED)
REVENUES:
NET SALES $ 31,156 $ 22,520 $ 74,952 $ 51,704
LEASE AND OTHER INCOME 1,119 748 3,781 2,116
-------- -------- -------- --------
TOTAL REVENUES 32,275 23,268 78,733 53,820
OPERATING COSTS AND EXPENSES:
COST OF SALES 25,352 16,974 57,994 38,661
SELLING, GENERAL AND ADMINISTRATIVE 5,643 2,519 13,469 8,539
DEPRECIATION AND AMORTIZATION 1,583 887 4,717 2,872
-------- -------- -------- --------
TOTAL OPERATING COSTS AND EXPENSES 32,578 20,380 76,180 50,072
-------- -------- -------- --------
INCOME (LOSS) FROM OPERATIONS (303) 2,888 2,553 3,748
OTHER EXPENSES (INCOME):
INTEREST EXPENSE 912 350 2,188 837
OTHER, NET 48 82 16 (48)
-------- -------- -------- --------
INCOME (LOSS) BEFORE OTHER NON-OPERATING EXPENSES (1,263) 2,456 349 2,959
OTHER NON-OPERATING EXPENSES:
LOSS ON INVESTEE 308 -- 403 311
FOLLOW-ON OFFERING -- -- -- 551
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEM (1,571) 2,456 (54) 2,097
INCOME TAXES (48) 30 32 30
-------- -------- -------- --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (1,523) 2,426 (86) 2,067
EXTRAORDINARY ITEM 486 -- 486 --
-------- -------- -------- --------
NET INCOME (LOSS) $ (2,009) $ 2,426 $ (572) $ 2,067
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EARNINGS (LOSS) PER COMMON SHARE, DILUTED $ (0.22) $ 0.31 $ (0.07) $ 0.27
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WEIGHTED AVERAGE COMMON SHARES USED IN COMPUTING
EARNINGS (LOSS) PER COMMON SHARE, DILUTED 9,220 7,722 8,736 7,787
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SELECTED OPERATING DATA:
RETAIL LOCATIONS (AT PERIOD END) 25,000 18,500 25,000 18,500
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CYLINDER TRANSACTIONS (IN THOUSANDS) 2,035 1,589 4,995 3,710
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